Avoiding these common mistakes can give that dollar in your pocket a little more company.

By Candace Braun Davison

You're Not Buying a Shiny New Phone

Whether you buy it now or you buy it later, getting a new phone means paying for it. But keeping your current phone after your two-year agreement is up means you might be making payments on it long after you've covered the full price of it. Many service agreements charge a subsidized rate for a phone upfront—about $200—plus a monthly payment fee that's included in your bill. When the 24 months are up, that fee remains part of your monthly statement, explains Consumer Reports. Until recently, you haven't had many other options. But, as of March 2013, T-Mobile allows you to use your current phone on a lower-rate, "no contract" month-to-month plan. Unlimited minutes, text messages and 2GB of high-speed data costs $60 per month. A comparable two-year contract plan elsewhere can cost $100 a month, which means that sticking with your current phone—and staying in a contract—could cost you up to $40 more per month.
If you really want a new phone, CNET found that opting for a no-contract plan and buying the phone at full price may still be cheaper than getting the same phone at a subsidized rate with a two-year agreement. An iPhone 5 and two years' service costs $2,020 at T-Mobile, but it can cost $2,600 elsewhere, the site reports.